Western Australia’s unemployment rate has risen slightly as wages continue to grow, according to fresh data. CCIWA Head of Economics Sam Collins explains.
WA wage growth outpaces the rest of the nation
Source: Australian Bureau of Statistics (ABS)
Wage Price Index data released this week revealed wages across WA grew 0.8% over the June quarter. This keeps the annual pace of wage growth unchanged since last quarter at 3.7%, the fastest pace of wage growth across the country. On a national level, wages grew 3.4% over the year to June.
This result was driven by strong increases to wages in the public sector which rose 1.1% over the quarter, compared with 0.6% wage growth in the private sector. This quarter’s lift in the public sector reflected the introduction of state-based enterprise agreements and increases in wages paid to aged care workers.
Over the 12 months to June, public sector wages (5.4%) have significantly outpaced private sector wages (3.2%).
WA’s unemployment rate ticks up over July
Source: ABS
Labour force data released today revealed WA’s unemployment rate increased in July by 0.1 percentage point to now sit at 4.2%. Despite the increase in unemployment, WA maintains one of the lowest unemployment rates in the country, with only NSW, Tasmania and the ACT lower. Nationally, the unemployment rate dropped 0.1 percentage points to also read 4.2%.
The underutilisation rate – the broadest measure of labour force tightness – rose 0.4 percentage points to 9.9% in July. While this is the highest rate recorded since February 2024, it remains well below pre-COVID levels.
Following a decline in total employment numbers last month, the number of employed people picked up again in July. WA’s workforce grew by 2,800 people over the month, driven by an increase in part time workers (+5,000). In contrast, the number of full-time workers declined slightly (-2,200). Female employment also declined over the month (-1,900), despite female workforce participation at a national level hitting a record high.
What this means for WA businesses
Despite the unemployment rate increasing slightly, WA maintains one of the strongest labour markets in Australia. The Reserve Bank of Australia (RBA) has acknowledged that the availability of labour is still likely to remain a barrier for employers, which could put continued pressure on businesses.
Healthy unemployment figures and solid wage growth are likely to see the RBA continue with their ‘wait and see’ approach before committing to cutting interest rates further, delaying the probability of further rate cuts until later in the year. Businesses will, therefore, need to plan ahead when navigating hiring and borrowing decisions.
CCIWA’s Economic reports are available exclusively to CCIWA Complete, Advantage and Corporate Members. For more, see CCIWA’s Economic Insight page.
